Fostering Global Agri-Commerce
Apr 3, 2024
Nigeria - Renowned consumer products company Cadbury Nigeria Plc is facing a severe blow as investors prepare for a year without dividends as a result of an astounding loss of N19.09 billion (US$14.7 million) after tax for the fiscal year 2023.
The company's annual report for the year ended December 2023 states that this miserable result is a sharp drop from the profit of N583.11 million (US$ 453,000) in the prior year.
This is in spite of a notable 46% increase in income from N55.21 billion (US$ 42.8 million) to N80.38 billion (US$ 62.5 million) in the previous year.
Unlike the N751.28 million (US$0.6 million) final dividend distribution in 2022, the company's board have decided not to recommend any dividends for the year in view of this unfavorable financial situation.
Cadbury Refreshment drinks, such as Cadbury Bournvita and 3-in-1 Hot Chocolate, account for the majority of Nigeria's income stream, with combined sales expected to reach N52.2 billion (US$ 42.5 million) in 2023.
Confectionery items that generate N25.6 billion (US$ 20.2 million) in sales include TomTom, Candy Caramel, Candy Coffee, Buttermint, and Clorets gum.
Given the difficult financial circumstances, which include a negative equity of N6.5 billion (US$ 5.5 million) in 2023, the business intends to employ debt structuring as a proactive step.
Efforts will be made to convert a US$7.7 million debt due to Cadbury Schweppes Overseas Limited, the primary stakeholder, into equity. This will increase Cadbury Schweppes Overseas Limited's ownership stake in Cadbury Nigeria to 79.39%.
Initially established as a corporation limited by shares in 1965, Cadbury Nigeria started trading on the Nigerian Stock Exchange in 1976.
Although the company's primary focus is on producing and marketing branded fast-moving consumer goods in Nigerian and West African markets, it also uses its cocoa processing factory in Ondo State to produce intermediate cocoa products, such as cake, powder, liquor, and cocoa butter.